The special session stalls

The special session stalls

The House postponed any consideration of tax measures on Monday, putting the special session on hold while legislators attempt to hash out their differences behind closed doors.

Number of the Day

133,000 - Estimated decrease in the number of Louisianans who will have comprehensive nongroup health insurance coverage by 2019, due to actions taken by the Trump administration and Congress. (Source: The Urban Institute)

The House postponed any consideration of tax measures on Monday, putting the special session on hold while legislators attempt to hash out their differences behind closed doors. The issue: House Republicans prefer to address the fiscal cliff largely with regressive sales tax measures, while many Democrats – led by  the Legislative Black Caucus –  want income taxes as part of the mix. Members of the Black Caucus made their principles clear before the start of the special session, in a public letter to the Governor that called for raising an additional $602 million by compressing personal income tax brackets. Jeremy Alford and Sarah Gamard for the Baton Rouge Business Report:

Rep. Ted James of Baton Rouge, the vice chair of the Black Caucus, said the “new development” is actually not new at all. He added that Republicans knew all along that income tax imbalances were a priority for the caucus, and they were incorrect if they assumed the caucus would back down. “Nobody’s happy,” James said. … The political landscape at the Capitol is shaky at best. Caucus members insist they will not vote in favor of a sales tax increase above four pennies and Republicans contend they’ll never back the proposed income tax alteration. All the while a nearly $1 billion budget shortfall looms—and the special session must conclude one week from Wednesday.

Julia O’Donoghue with Nola.com/The Times-Picayune highlights another concern: The tax bills currently pending on the House calendar don’t raise nearly enough revenue to fill the budget hole:

The Black Caucus also said they want to raise enough revenue to cover the full $994 million state budget shortfall that opens up July 1. Currently, if the Legislature passed all of the tax bills it is considering, lawmakers would still be $260 million short of what is needed to solve Louisiana’s fiscal crisis. That type of shortfall would likely require budget cuts, which Black Caucus members want to avoid.

The House is scheduled to reconvene Wednesday morning at 10 a.m., when they plan to debate various tax measures, a dangerous spending cap proposal and a watered down Medicaid work requirement bill.

 

Cash assistance “reforms” have hurt families

Conservatives often hold up the 1996 “welfare reform” legislation as an example of a successful reworking of a federal safety net program. In reality, turning the Aid to Families with Dependent Children (AFDC) program into a loosely regulated block grant program allowed states to shift funds away from providing cash assistance to the neediest children and families. Instead, states, including Louisiana have used the block grant funds to fill budget gaps and fund other priorities not directly related to child welfare. New research reveals that states’ disinvestment in assistance to vulnerable families is correlated with an increasing number of children ending up in foster care. Shawn Fremstad with TalkPoverty:

Most children end up in the child welfare system not because of abuse, but because officials decide parents aren’t adequately meeting their children’s basic needs. Recent research suggests that when low-income parents receive even modest amounts of additional income each month, their children’s risk of involvement in the child welfare system goes down. As a practical matter, it will be difficult to definitively prove that cuts in temporary assistance are pushing more children into the child welfare system. But debates about causality shouldn’t distract from the fundamental problem. If a state has more children in foster care than children receiving temporary assistance in their own homes, this should raise searching questions about whether the state is meeting the first purpose of temporary assistance.

 

College endowment tax should help students

The Trump tax cut included a new tax on colleges and universities with large endowments. Many Ivy League and top tier schools have accumulated billions in their nest eggs and spend more money on simply managing their endowments than they do on scholarships for deserving students. Aaron Klein and Richard V. Reeves with The Brookings Institution argue that the endowment tax should be strategically applied to reward universities that invest more in creating opportunity and equity for low-income students:

There is a strong case for public policies that encourage funds to be used on students, and especially on students from poorer backgrounds, rather than growing massive tax-free endowment funds. The Republicans, however, have not used tax reform to alter behavior or change incentives. They have simply gone for the money; with the political side-benefit of tweaking the noses of the learned liberals dominating the top ranks of elite college. To the GOP, college endowments are an ATM, with the money taken out given straight to corporations and the rich. A better approach would be to use an endowment tax as a means for altering incentives in a pro-mobility direction. Rather than punishing all colleges with large endowments equally, the goal should be to reward those which are using their funds in an opportunity-enhancing way.

 

Undermining health care reform

Although Republicans in Congress were unsuccessful in their attempts at wholesale repeal of the Affordable Care Act, they and President Trump have taken a series of steps to undermine the success of the landmark health reform law. Those actions, including repealing the individual mandate, increasing access to unregulated association health plans and cutting funds for enrollment assistance have already resulted in higher premiums and millions of people losing health coverage. Those trends are expected to continue into 2019, as the Trump administration loosens regulations on cheap “short-term limited duration” health plans. Vox’s Dylan Scott shares the findings of a new study by The Urban Institute:

Their numbers told a strikingly different story from the Trump administration: 9 million fewer people with ACA-compliant coverage — which is effectively the CBO’s standard for defining whether you are uninsured or not — once you add up the mandate’s repeal, outreach cuts, and the expansion of short-term plans. About 4.2 million would be covered by the non-ACA short-term plans — which can have annual or lifetime limits, which might cover fewer services, and which can discriminate based on health status. The Trump administration is, in other words, overseeing a significant rollback of the historic coverage gains made under President Barack Obama and the ACA.

 

Reminder: LBP on the road

The Louisiana Budget Project is teaming up with our friends at the Louisiana Partnership for Children and Families on a series of nine meetings around the state to discuss issues affecting children, families and caregivers. The meetings are geared to child-serving stakeholders, but everyone is welcome. The meetings kick off this morning in Houma and continue through March 9 in New Orleans. Click here to find out when we’ll be in your area and visit www.louisianapartnership.org for more information.

 

Number of the Day

133,000 – Estimated decrease in the number of Louisianans who will have comprehensive nongroup health insurance coverage by 2019, due to actions taken by the Trump administration and Congress. (Source: The Urban Institute)